Warning: TL;DR...

Hi Este,

I am glad that you started this conversation, as I feel it is an important one to be had. I believe that most people in the larger crypto currency community (Bitcoin/Litecoin/??) think like you do in regards to the importance of marketing to attract new users, and pushing for merchant adoption. While I do not disagree that those things help increase the utility of their respective crypto currencies, I see things differently.

This was one of the main reasons why I left the Litecoin community and no longer support it. The Litecoin community and I largely disagreed on this principle, as they mainly want to focus on marketing rather than innovation and improving crypto currencies on a developmental level and in an innovative manner. Basically, they are content blindly following anything that Bitcoin implements with the few developers they have, and the rest of the community is dead set on marketing and merchant adoption as the path to success for Litecoin. I think there are several problems with this line of thinking, and I will try to explain why.

Alternative crypto currencies are supposed to be the testing grounds for improvements upon existing crypto currencies and new features. If they are not doing either of these things, then I do not see the point of their existence and it screams of a get rich quick scheme. Any crypto currency that does neither of these things I consider to be a "pump and dump" and/or "scam coin."

Marketing and merchant adoption are important, but marketing and merchant adoption coupled with no innovation and development is akin to betting that people are sheeple. In Litecoin's case, they are betting that people will look past the lack of innovation and the fact it is pretty much a copy and paste coin. While I do not disagree that the vast majority of people in the world are sheeple in regards to problems with trusted third parties and FIAT, it is not these people that are adopting crypto currencies at this point in time. The sheeple are somewhat ignorant to the extreme need of crypto currencies and decentralized technologies. These people will come eventually when crypto currencies have already blown up, and are a vast improvement over the current financial system. It will happen naturally, not by some marketing scheme with an underlying code base that was copied off of some other crypto currency.

It is the free-thinkers (skeptics/non sheeple) that are in the process of adopting crypto currencies and decentralized technologies. These are the same people that will be doing the marketing and pushing merchant adoption. If the free-thinkers can look past your crypto currency’s marketing strategies and see that the underlying crypto currency is mainly a “pump and dump” and/or “scam coin” with no innovation or improvements over another larger already existing crypto currency, then how can they be expected to support it? How can they be expected to help with marketing and pushing merchant adoption, when they don’t believe in the underlying technology themselves?

I believe there are only two answers to that question in regards to alternative crypto currencies. The first being that the supporters of the alternative crypto currency are sheeple themselves, and the second being that the supporters of that crypto currency are only focused on one thing and that is making a profit by "pumping and dumping" at the expense of sheeple. Both answers to this question make me completely and utterly sick, and I do not think that Satoshi would approve either.

After much analysis and reading user’s opinions and thoughts in such crypto currency communities over the years, I have come to the conclusion that most of their community at this point in time falls under the latter answer to that question, which makes me even sicker when thinking about it. Crypto currencies are still in the early adopter phase. As I said earlier, it is mostly the free-thinkers that are adopting crypto currencies and decentralized technologies at this point in time, and I find it highly unlikely that the majority of these early adopters are sheeple. It is utterly shameful people are praying on sheeple for their own financial gain, and relying on “the greater fool theory” to fatten their wallets.

Again, this is why I left the Litecoin community. I realized that it is an either/or situation, and I was completely disgusted by it. Either I was surrounded by sheeple, or I was surrounded by cut throat free-thinkers preying on sheeple by the use of the “greater fool theory,” and either way I decided I wanted no part in it. There was an “ah ha” moment in which I decided Litecoin needed to be innovative and really focus on improving crypto currencies on a technical and developmental level, or the sad reality is that's just how it’s going to be and how it will always be as long as they continue down the same path.

I am a big believer in an altered quote from a corny 90s movie named “The Field of Dreams” in regards to crypto currency adoption, “if you build it they will come.” If you stop and think about it for a second, this is exactly what Satoshi did with Bitcoin, and look at how far Bitcoin has come today. If a crypto currency is innovative enough and a vast improvement over prior crypto currencies, the users and merchants will come eventually. Now and in the near term future, as a crypto currency community… the free-thinkers and early adopters… we should mostly focus on improving crypto currencies the best way possible through innovation and development.

Sadly, I think Bitcoin and Litecoin have mainly gotten off the path that Satoshi paved which was focused on innovation and development, and adoption happening naturally instead of forced upon people. A large part of their community has trouble seeing that both of these crypto currencies are not perfect and have flaws. Try bringing up the flaws of Bitcoin in the General Discussion sub forum and see the kind of hostility and ignorance you are met with. This kind of group think is poison, and it affects the improvement of crypto currencies on an innovative and developmental level, and will only slow down the improvement of crypto currencies. They are not in a large way focusing on implementing new features, improving existing features, and openly talking about flaws of their respective crypto currency.

Doubly sadly, I think most of this group thinking stems from greed. They do not want to talk about the flaws of Bitcoin/Litecoin, and they brush everything off as FUD or “scam coins gonna scam coin.” When in reality they are the ones that are doing the scamming, as they are so worried about fattening their pockets, that they stifle innovation and development. In general, they are so worried that if someone reads a genuine concern about a flaw or short coming about Bitcoin/Litecoin and believes it, that that someone will not invest in the crypto currency they have invested in. This affects the size to which their pockets can fatten, they do not like this one bit, and they make every attempt to shut it down and label it as FUD.

In summary, marketing and pushing for merchant adoption is important, but it is equally important to not succumb to greed and ignorance and to push the crypto currency and/or decentralized technology movement forward through innovation and development. Don’t take this as an attack against Bitmark. I have read what you guys are doing and I realize that you guys are being innovative, and truly making an effort to improve crypto currencies as they are today. I applaud crypto currencies like this for paving the path to the future of crypto currencies, a path that Satoshi started and a path that the larger crypto currency community seems to be wandering off of. Once that path is filled with great new useful features and vast improvements over old crypto currency features, the general public will flock to that path once they realize it is so much better than the government built overgrown bumpy pebble path they have been travelling down their entire lives.

I'm glad to see eMunie is still a thing, I thought the project had died. I went over to your forums and it seemed pretty dead, and haven't seen you Fuserleer in months. I'm glad you are back though and interested to see what you've been developing behind closed doors.

This thread went downhill fast.. we were having such a good conversation before.

How is Nxt planning on doing this? I have a feeling it may be the same as BitsharesX's back up plan.. getting the average of a bunch of market data feeds.

If it is a different approach, could you explain how you guys are planning on doing it?

It ran out of battery a hour ago rofl, but I was.

Maybe someone else can help me out here.

Am I doing a decent job so far in explaining this? I admit I am not entirely sure how bitassets will work either, but it mostly makes sense I think. Having this conversation has helped me too.

It will correct because traders can profit off of the price correcting, and the people trying to manipulate the price will lose money as long as the majority of trading volume is not manipulating the price. By trying to manipulate the market, you are betting that others will follow your lead which is quite risky. If others don't try to manipulate the market and bitUSD stays close to the value of a US dollar, any manipulator will lose money.

Please read that document if you haven't, it explains a lot of this in detail. I need to step away for a while.. my fingers hurt  my dog needs to go on a walk. bbl

If the value of 1 bitUSD is less than the value of 1 actual US dollar, then it would probably be an easy decision to buy bitUSD above the current bitUSD market price (closer to the actual real life value of the US dollar.) When the bitUSD market corrects to match your position, you will have profited off of that price movement, and you end up with more BitsharesX than you started with.

If the value of 1 bitUSD is more than the value of 1 actual US dollar, then it would probably be an easy decision to buy bitUSD below the current bitUSD market price (closer to the actual real life value of the US dollar.) When the bitUSD corrects to match your position, you will have profited off of that price movement, and you end up with more BitsharesX than you started with.


I think Daniel explains the dynamics of trading better than I can in this document. I have not read it yet, so I apologize if I have spread any misconceptions. I do not think I have though... he just explains pretty much the same things in a different way.

For instance... I already learned something I did not realize. After quickly scanning over the document, it seems there is another protection from manipulation built into the market:

Yes, that seems correct. That is how the correct value of a bitasset is determined, and is likely to resemble the true value of that asset in the real world.

There is another layer on top of that though, as people can bet on the price rising or falling relative to the value of BitsharesX, and make money that way as well. So, it is not only for determining the value of an asset in the real world, but it is also for people whom would like to profit on market movements.

No problem, this is new territory for most of us, we are all learning. I am not sure I understand it fully myself, but I think I have a pretty good idea of how it works. Anyone feel free to jump in and correct me if I am wrong about something.

Exactly, bitUSD is pegged to the US dollar by the market. The expectation certainly is that it will very closely resemble the value of the US dollar. bitUSD will closely resemble the value of the US dollar because people will be able to easily profit from it if it doesn't. The incentive for people to go long or short if someone is trying to manipulate the market will keep it in check. People like money, even more so, they like to make easy money. It will be very easy to see if someone is manipulating bitUSD and someone can come in and profit from that attempt of manipulation. I think going long or short on bitUSD when someone is obviously manipulating the price would be really easy money.

I suppose there is one potential thing that could screw it up, and that is if someone had much more money than the market could bare IE. if the bad actors had more money than the good actors. I think this becomes less of a problem as deep market depth is established, and I don't even think there would be an economic incentive to do so as the market would eventually eat it all up. I'm not so sure about this point though.. I'll have to think about it more, but I am certain when I say it won't be nearly as big of a deal as market depth is established.

It works much the same that it does in any free market. Manipulators are taking a risk by manipulating the market. The manipulators are taking a risk that the public recognizes the manipulation and the market immediately corrects, causing the manipulator to lose a considerable amount of money. If they do not recognize this manipulation and see it as a normal market movement, then they stand to profit from it.

You question as to what would someone stand to gain from manipulating the bitUSD market is exactly why I think bitassets will work, because there is really no incentive at all. Unlike Bitcoin being traded in the free market, people can easily look up exactly what the value of the US dollar (or Btcoin, gold, etcetra) is relative to BitsharesX by comparing the current market value of the BitsharesX/USD (or BitsharesX/BTC/USD) trading pairs on other exchanges. It will be much easier to detect manipulation of a bitasset when you know almost exactly what that asset is worth in the real world markets from thing like data aggregators and market feeds which are sourced directly from those markets.

You cannot prevent manipulation in the gold, Bitcoin, Or FIAT markets, but the fact it will be so easy to tell if bitassets do not equal the current value of a real world commodity is the reason why I think it is unlikely to be manipulated. Manipulation will likely be very unprofitable in bitassets due to the obvious value of the commodities traded which people can get from many 3rd party services and data feeds which come directly from those markets. Therefore, bitassets will closely resemble the value of their real world counterparts.

Exactly. That is bitassets versus the Nxt asset exchange (as it exists today).


BitUSD can be manipulated in the same way anything traded on the free market can be manipulated (Bitcoin, stocks, Etcetra.) In Bitcoin's case, there is financial incentive for people to trade against manipulation due to things like arbitrage or perceived value by the public for instance. With bitUSD, the incentive for people to trade against manipulation is that they will likely make a profit on it by going long or short against the manipulative trader(s).

If a bad actor tries to manipulate BitUSD by dumping on the bitUSD market below the value of the actual value of the dollar, then there is an economic incentive for someone to scoop up those cheap bitUSDs. They will likely profit from the inevitable price swing that will incur when the honest actors come in and bring the bitUSD market back it equilibrium with the actual value of the US dollar. The opposite incentive is there if someone tries to pump the value of bitUSD greater than the actual value of a dollar.

As soon as market depth is established, a certain amount of volume is achieved, and skepticism bitassets will work dies down, bitUSD should very closely resemble the value of the US dollar.

You have a point there. It may work as a paid service, and some fear that TOR has already been compromised by the NSA. I don't personally believe this.. I think they can compromise a small amount of traffic but for the most part they can't. However, DarkTOR can suffer from the same, no? By the government setting up DarkTOR nodes themselves?

Another way to look at it being free would be as a marketing strategy... Having free DarkTOR can be a way of stealing the black market business from Bitcoin. As of now most of the deep web is largely still using Bitcoins, so you could look at it as a marketing strategy. It would create perhaps more of a demand and reason to use Darkcoin over Bitcoin, as they don't seem to be too particularly worried about it at the moment.

Kind of like Dropbox offers free service up to a certain amount of Mb, or Teamviewer offers free personal use and charges for business use. It is good to introduce people to the technology/company and purchase other services.

It is based off of the price of BitsharesX relative to the US dollar, as determined by the free market.

You would only need 1 BTSX in the case of BTSX being worth $0.50, as only 2x collateral is needed (I think) if you wanted to borrow 1 bitUSD. If BTSX falls in price and your collateral can no longer cover your 1bitUSD, then your position is released and you lose your collateral proportional to the amount collateral that is required to cover your position.

It is determined by consensus on the free market, by some people going long and some people going short on a specific asset. There is no guarantee, but short of manipulation or some flaw, there is no need for a guarantee. The free market will always even out to the true value of the USD as soon as a large amount of orders are placed on both sides, proper volume is established, and skepticism dies down that bitassets will not work for some reason. Because of those reasons, bitUSD will likely be worth less than US dollar until "market equilibrium" (or consensus) is reached. I expect this to happen eventually, but on the release and in the immediate future after the release, bitUSD will likely be worth less than a real US dollar. That is speculation though...

You need to trust bitfinex that they hold the correct amount of collateral and don't do any funny business, so it is completely different from bitassets.

Cool, I need to go do some research on RC5.

I agree it could use a lot of bandwidth and cost users that support the network, but TOR is supported by volunteers... it is hard to compete with free if your service is not free itself. I just can't imagine it taking market share from TOR if you need to pay to use it. I guess that is just my opinion/speculation though.

Nxt's asset exchange, as it is currently implemented, relies on trust. Sure, I could create a "NxtUSD" asset on your exchange, but people would need to trust that I am holding the correct amount of collateral and not embezzling and/or using the collateral in improper ways. Bitshares version is decentralized and trustless since it's done on the free market.

You are right, you guys could implement something like bitassets. Why don't you guys go do it instead of hating on a good idea that is needed?

There is nothing stopping Nxt from implementing something similar to bitassets. I think that first mover advantage is important though and BitsharesX has them beat there. Look at how far Bitcoin's first mover advantage has got them, I think we can all agree there are many more technically advanced crypto currencies with more features and improvements over it, yet it is still the king of crypto currencies.

I'm not sure how many times people have to tell you this, but the Nxt asset exchange is not the same thing as Bitshare's bitassets....... they are two completely different concepts. It seems like you still don't understand what bitassets are.


It is nothing like reinventing the wheel...

Centralized exchanges suffer from many vulnerabilities/risks/inconveniences including risk of government asset seizure, losing funds due to being hacked, volume and price manipulation, going insolvent due to bad business practices or running ponzi-like schemes, complicated know your customer requirements (it can be hard or take a long time to get "verified"), Etcetra. (I'm sure I'm forgetting something.)

Technically, a decentralized version would suffer from none of these problems.

I agree Dark Tor sounds pretty neat. One thing has me worried though... Are they planning on charging people to use it? I'm not sure that's going to work out too well considering TOR is free. I think I saw a poll about this yesterday.. Something like "how much would you pay for it?" I voted for nothing, and it was well in the lead, I imagine that option beat out all the others by a large margin.

RC5 is a newer iteration of Dark Send or what??

That sounds like a good plan, I guess we are on the same page.

I think most people don't understand how big a problem privacy is in the larger crypto currencies, and the privacy implications that come along with that. It is nice to see that some people "get it", as there are many non nefarious reasons to want to protect your privacy!! This (making anonymous crypto currencies or crypto currencies more anonymous) is not only about protecting our privacy, but also about protecting the people that don't understand that.

I can't really keep up with all the various projects as I'm interested in too many. There are a lot of great projects going nowadays, it is pretty exciting!